Brazil’s Trade Balance Starts May US$ 174 Million in the Red

Brazilian cargo train In Brazil, May started with a deficit in the balance of trade (exports minus imports). According to data disclosed by the Brazilian Ministry of Development, Industry and Foreign Trade, in the first week of May, with only one business day, exports reached US$ 720 million, whereas imports totaled US$ 894 million.

This resulted in a negative balance of US$ 174 million, the fifth weekly deficit posted this year.

In the accumulated result for the year, exports reached US$ 53.469 billion and imports, US$ 49.063 billion, resulting in a surplus of US$ 4.406 billion, 67.24% less than recorded during the same period last year (US$ 13.450 billion).

The balance of trade surplus has been decreasing as consequence of the reduction in the value of the dollar, which encourages growth of imports at a higher rate than exports. Furthermore, companies have been purchasing machinery and equipment, and the rising income of Brazilian workers encourages acquisition of imported products.

Businessmen consider that, as Brazil attained investment grade, the country should become more attractive to the entry of foreign funds, which should reduce the dollar value even further and, therefore, affect the performance of the balance of trade.

In recent weeks, the balance's result was also influenced by the tax auditors' strike. According to the Foreign Trade secretary at the ministry, Weber Barral, if it were not for the strike, the balance of trade surplus in April would have been US$ 1.2 billion greater. Last month, the balance of trade surplus stood at US$ 1.744 billion.

ABr

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